* The Sun-Times reports on yet another lawsuit against Bruce Rauner’s former company GTCR…
In a federal lawsuit filed against GTCR, Universal American says Rauner’s firm essentially sold it a $222.3 million lemon after APS and GTCR executives engaged in a “deliberate campaign to conceal the truth.”
But this choice little nugget was buried way down in the piece…
Without admitting wrongdoing, APS [which was owned by Rauner’s company from 2007 until 2012] agreed to pay $13 million to settle allegations from the federal government and the state of Georgia in 2011.
The feds said the firm “failed to provide the required services to a large portion of the Medicaid recipients and over-billed the Georgia Department of Community Health.” This allegedly occurred from 2007 until 2010.
“APS Healthcare took Medicaid’s money for itself and left some of our most vulnerable citizens without the aid they deserved,” Sally Quillian Yates, the U.S. attorney for Georgia’s northern district, said at the time the settlement was announced.
Ouch, ouch, ouch, ouch, ouch.
* And the Quinn campaign followed up early this morning with a press release containing “Additional examples of fraud”…
“If his (political) narrative is ‘I’m a hands-on manager,’ this is not a firm where you would want to say that,” said Peter J. Henning, an expert on securities fraud and white collar crime. “If he was hands-on, he certainly might have gotten his fingers dirty. Henning said Lason might be recalled as “one of the worst accounting frauds ever” had it not been upstaged by similar scandals at much bigger companies — Enron and WorldCom.” (Chicago Tribune, 1/20/14)
In an August 1999 interview with The Wall Street Transcript, a subscription newsletter that features interviews with business leaders, Rauner hailed Lason as a “great company … doing quite well,” and went on to describe an ownership philosophy at GTCR steeped in the kind of hands-on involvement he now vows to bring to the governor’s office if elected. “We spend a lot of time living with our companies on a week-to-week basis, understanding what’s going on, and being in the flow of information, so we can be helpful and knowledgeable about the operation,” Rauner said. (Chicago Tribune, 1/20/14)
In 2004, Mr. Rauner made a personal $4.5 million startup investment in fund manager Acartha Group LLC, a suburban St. Louis firm founded by Burton Douglas Morriss. Before Acartha, Mr. Morriss had already arranged one deal in which the duo made more than $75 million. Mr. Rauner, an avid outdoorsman, also owned a hunting camp with Mr. Morriss. But in 2012, the SEC seized control of Acartha, accusing Mr. Morriss of defrauding investors of $9.1 million. Mr. Rauner was a “passive investor” who was “misled and defrauded” by Mr. Morriss, like dozens of others, Mike Schrimpf, a spokesman for Mr. Rauner’s campaign, says in an email. “Bruce is angered and outraged by Morriss’ actions.” […](“Rauner backed firm later shut down for fraud,” Crain’s Chicago Business, 2/24/14)
To acquire his stake in Acartha, Mr. Rauner traded his interests in Hela and another Morriss venture, for which he paid $2.5 million, and paid an additional $2 million in cash. The two men along with two others also owned a hunting lodge and farm in Canada. […](“Rauner backed firm later shut down for fraud,” Crain’s Chicago Business, 2/24/14)
In a 2005 interview with the St. Louis Business Journal, Morriss said that two of his partners in the Acartha Group included New York financier Nicolas Rohatyn and Bruce Rauner, who operates a Chicago-based private equity firm. They did not return phone calls Tuesday. Morriss served as chairman of the board…”Morriss lived a lavish lifestyle, living in a multi-million dollar home, driving luxury automobiles, leasing a private airplane and helicopter, and taking expensive vacations,” the SEC complaint states. (“SEC accuses Clayton-based financier of defrauding investors,” St. Louis Post-Dispatch, 1/18/12)
“Bust Out” Nursing Home scheme
According to a U.S. Bankruptcy Court judge in Florida on March 14, Rauner can’t walk away from being at the helm of an elaborate “bust out” plan to avoid culpability for purchases and practices of a string of nursing homes.